Mr Emmanuel Ravut – Bayet & Associés law firm –

Mr X owns 100% of the capital of company A, which itself owns 100% of the capital of company B, the shares of B constituting its only asset.
Mr X has found buyers who wish to buy either the shares of A or B.




Therefore, there are two possible solutions:


– 1°) either Mr X sells the shares of company A (and therefore indirectly the shares of company B, its wholly-owned subsidiary),
– 2°) or company A sells the shares of company B.


We will start from the basis that the value of B is 250,000 Euros, and that the value of A, whose only assets are the shares of B, is also 250,000 Euros. We will also start from the basis that the initial capital of A was 10,000 Euros, contributed by Mr X.


In the first solution, Mr X will have to pay a 27% tax bill (16% tax + 11% social security contributions) on the capital gain achieved from the sale of the A shares.


This capital gain will be equal to the sale price of the shares of A, 250,000 Euros, less contributions, 10,000 Euros, i.e. a capital gain of 240,000 Euros, and therefore tax of 64,800 Euros to be settled for Mr X.


In the second solution, the sales of B shares by company A will not incur any tax for company A, and this latter will have an available cash flow, enabling Mr X to make investments through its holding company A, since he will have 100% of the sale price of the B shares.


As long as this cash flow is retained by company A, no tax will be payable; if Mr X wishes to collect the sale price, the least costly solution shall consist in the payment of a dividend of 250,000 Euros by company A, which will incur income tax for Mr X, on 60% of the amount collected, according to his tax bracket (i.e. tax of 60,000 Euros, for the higher income tax bracket set at 40%), plus social security contributions (11% of the dividend collected by Mr X, i.e. additional tax of 27,500 Euros), i.e. a total tax bill of 87,500 Euros.

Resulting from the amalgamation of the professions of lawyer and legal advisor, Bayet & Associés, a law firm established in 1991, has retained its specificity and remains focused on business law, taxation and employment law.
Its clientele is essentially made up of SME/SMIs, primarily carrying out their business in the tertiary sector.


The firm’s standout feature is that each of the partners is specialised in an area of law and the client is able to find within the firm all the skills that a company head may require. Although remaining a firm on a human scale, the client is guaranteed that his lawyer will be available and respond promptly.

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